Green shoots for Canberra market as rates hold delivers confidence

Canberra’s residential property market is showing signs of awakening from the doldrums of last year as buyers return to open homes and auctions.

Two weekends after the end of the holiday break, it appears there is some confidence back in the market, helped by the Reserve Bank keeping interest rates on hold and the possibility of actual cuts later in the year.

Auctions on 3 February revealed pent-up demand, with 107 properties listed, 96 reported and 47 sold for a clearance rate of 49 per cent.

Last weekend, numbers had dropped back to 46 listed, 43 reported, and 21 sold for the same clearance rate.

CoreLogic reported 60 auctions for the week, with 49 reported and 30 properties sold for a clearance of 61 per cent.

This week, SQM reports 109 properties listed for auction in the ACT, with 59 scheduled for Saturday.

Director of sales and projects at The Property Collective Will Honey said there was definitely more interest from buyers and he predicted that the fall in prices would soon bottom out, although there would be no return to the boom times of the pandemic.

While interest remained patchy, some open homes had up to 40 people through.

“We haven’t seen these sorts of numbers in a long time,” he said.

“Late last year definitely didn’t feel like this. The market hasn’t shifted into recovery or growth yet but there are little signs which we haven’t seen for a while.”

And there have been some amazing results, albeit at the upper end of the market where economic conditions are not felt as much.

That included $3 million for a four-bedroom home at 3 Rawson Street in Deakin that sold on 3 February by Blackshaw Manuka, and last Saturday, $5.37 million for a four-bedroom home at 56 National Circuit in Forrest, sold by Belle Property.

He attributed the “sprouts” of confidence to the rates decision, positive reports from the other capitals trickling through to Canberra and New Year buying from people who had reassessed their plans over the break.

Mr Honey agreed that more people had decided now was a good time to think about buying before prices started to rise again.

“People are thinking there’s an opportunity to buy now, especially if rates go down in the second half of the year,” he said.

“People are thinking we better get in now rather than waiting because we might be paying more.”

There was also a lot of choice at present, with listings above the long-term average.

“There are more properties on the market. It’ll be interesting to see if that supply is taken up by the new buyers who have entered the market,” Mr Honey said.

Mr Honey said the fact that prices had come back on freestanding homes had made the larger townhouses the slowest sector to move.

“The larger townhouses that are competing with home stock, that’s probably the slowest end of the market,” he said.

“They’re probably looking at them and going, ‘Maybe I can buy a house rather than a townhouse’.”

He expected the gap between a new house and apartment to continue to close.

The year was looking like having a slight recovery in prices and a balanced market.

“I think we’re going to bottom out, not drop any more, and we’ll have a nice steady market for 2024,” Mr Honey said.

“A bit of stimulation in spring, we’ll have an influx of properties then as well.”